November 12, 2007

'A Trusted Friend'

Hsustock!Those three words cemented Norman Hsu's standing in the Democratic Party. A lengthy Wall Street Journal report brings readers a comprehensive narrative of the con man's case, including his embrace by the Democratic Party, and especially Hillary Clinton. Her appearance at a combined Hsu birthday bash and fundraiser clinched his status as a prime mover, a status Hsu used to raise funds and defraud investors:

He hosted a March 2005 fund-raiser for freshman Illinois Sen. Barack Obama's political-action committee. He threw a party in his SoHo loft for Harold Ford Jr.'s Senate bid. In June 2006, at the St. Regis in San Francisco, he combined a birthday party for himself with a fund-raiser for Mrs. Clinton, who was running for re-election to the Senate. She appeared live on closed-circuit TV.

"Hello, Norman!" she said, according to attendees. "Happy Birthday!"

The audience included former California governor and now state Attorney General Jerry Brown and consultant James Carville. "Norman Hsu is a trusted friend," Mrs. Clinton told everyone, according to Mr. Waters, who was there. Mr. Hsu, in a dark suit, stared up at the screen, smiling shyly. ...

Some of the political donors he recruited, including Mr. Waters, were also his investors. Some of them say they felt pressured to contribute for fear of being cut out of the next lucrative deal. "I'm a Republican," Mr. Waters notes.

"I was a donor who had my arm twisted to make a contribution to Hillary Clinton's campaign on behalf of Norman Hsu," one angry investor wrote recently to the Clinton campaign, demanding his $2,300 back.

The sordid tale gets told from beginning to end for the first time in a mainstream media outlet. Hsu starts off sounding like the perfect example of an American immigrant success story. He comes to the US after supposedly losing both parents and gains a college degree at UC Berkeley in computer science. Later, he receives a graduate degree from the prestigious Wharton School of Business, and sets his mind to becoming a success in the clothing industry.

However, it doesn't take long for Hsu's character flaws to surface. He showed little aptitude for business even with the Wharton degree, and he started taking shortcuts and making bad decisions. Hsu found out that he could convince people to continue making investments in his collapsing businesses, which led him to making that his primary focus. Hsu talked people out of their money, and then disappeared when they discovered the ruse.

In politics, that particular skill comes in handy, as Hillary Clinton and the Democrats soon discovered. After re-entering the US following years of dodging a prison sentence, Hsu worked his way into the graces of the Democrats, first through his own donations but soon by bundling others. He used his political connections to find more investors for his Ponzi schemes, and then pressured the investors into helping him strengthen his ties to Democratic Party politicians. Having Hillary Clinton celebrate his birthday allowed him to convince investors of his integrity and substance.

Hsu won't have much occasion to use his talents in prison. He will find his Ponzi scheme strategies wasted on the other criminals that will surround him for the next several years. If Hsu's past gives any indication, however, he may well decide to bargain for his freedom, or at least a shorter prison stay, by working with the feds on campaign irregularities. If he does, the Democrats will find it harder and harder to maintain the illusion of integrity that helped Hsu win investors and friends in high places. (via Hot Air)


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